Someone is going to prison:
MF Global, the failed securities firm led by former Goldman Sachs chief Jon Corzine, admitted using clients’ money as its financial troubles mounted, a federal official says.
An MF Global executive admitted that to federal regulators in a phone call early Monday after regulators discovered money missing from clients’ accounts, according to an official familiar with the conversation.
The official spoke on condition of anonymity because he wasn’t authorized to discuss an investigation by federal regulators.
Government rules require securities firms to keep clients’ money and company money in separate accounts. Violations can result in civil penalties
Dipping into client funds is *the* big no-no in the financial world. But it seems like they were treating their clients the way Corzine treated the New Jersey taxpayers. It will be interesting to see just how far this goes up. And even scarier is this: did MF Global go rogue? Or are/were other banks doing the same thing? If the latter, this could get extremely ugly extremely fast.
The OWS folks might get their wish after all.